New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1887-06-23
THE TREASURY AND THE MONEY MARKET.

THE TREASURY AND THE MONEY -N4RhEJ.
Secretary Farchild. or some other official In
the Treasury Department manifests strong
anxiety to have the public convinced that the
money market is to be easy this fall, undis-
turb cd by Treasury operations and well Supphcd
with funds. In this particular the Aforesaid
official perfectly agrees with the spectators
who want higher prices. But large and leglt-
mate commercial and industrial interests de
pend in measure upon the monetary prospect.
and it is therefore well to give all the weight
they merit to the Treasury outgiyings. 1t was
stated some days ago that fear of strngency
carly in the fall had nearly disappeared from
the street, and tho possibility OF gold imports
is now discussed quite generally. With the
large increase in exports which the fall IN
wheat permits. and the wide difference between
the rate of interest here and at London, some
movement of specie this way would not be sur
prsng.
The Treasury forecast is that receipts in July
and August will be about $65,OOOooO OF
$64, OOO, 900 in excess Of the profits OF SILVER
coinage; that ordinary expenses and interest
will take out $27,OOO,OOO, while Sl2 .ooo,-
900 will be required for pensions in July, tho
appropriation being now exhausted. and as much
more in August that nearly $2OOOOOOO VIII
be paid for bonds July /, $4,OOOOOO during
July and August for silver bullion, and that de
posts in banks from internal revenue receipts
will be permitted to accumulate to the extent
required In this way, it is held, the surplus
| in the Treasury can be made lower September
than July l. One defect in this statement is
| obvious it includes that the $19,7l6,OOO pay
| able for bonds July /, but makes no account OF
corresponding deposits for redemption of bank
notes These will swell trust funds held by
the Treasury, though those funds are not rec
| ognized in the debt statement as current liablh-
| ties.
| Beyond doubt the Treasury can in the man
ner proposed avoid drawing money from the
market for the first two months of the next
fiscal year. If it pays a third of the years
pensions in sixty days and hastcns other dis
bursements on the years accounts in like man
ner, and at the same time allows deposits by
collectors to accumulate in banks, the supply of
money in circulation can for some time be kept
undiminished. 1t is not necessary to tell prac-
tcal men that this process cannot go on forever:
the years payments must after all be limited
| by the years appropriations, and deposits in
banks will be limited by the ability Of the par
ticular banks in the different collection dis
tricts to mako profitable use Of the funds
The latter method Of preventing contraction
is evidently one upon which great reliance is
placed by the Treasury; and it is likely to elicit
much public discussion hereafter. The Ian
guage Of the law (Section 5, 1889 leaves much
discretion with the Treasury in the choice of
banks as depositaries and as to the amount of
security required The law obviously was not
intended to enable the Secretary to keep per
manently any considerable part Of his reserve
in banking institutions. where it would be
loaned to the public The penalty prescribed
by Section 5,499 for failing to keep safely
any public money so deposited is Imprisonment
for term not to exceed ten years, besides
fine equal to the amount involved, and prudent
bankers will be deferred from using funds so
received in aid of dangerous speculations.
But others are not prudent, as the collapse
of the Fidelity Bank of Cincinnati and the ar
rest of some of its officers illustrate. II hap
pens that the banks which will receive most Of
the money, under provisions of law. are those
in the districts where the largest collections